Land Transfer Rebate Program 1999
Purchasers of property in Ontario are required to pay a fee to the province called the Land Transfer Tax. The province charges this tax at the time that the transfer into your name is registered and the amount of the tax varies with the value of the property.
A program has been in place for several years whereby the province granted an immediate rebate of the Land Transfer Tax to first time buyers of newly constructed homes. This program was last extended by Finance Minister Ernie Eaves and will still apply to 1999 closings.
What does that mean for you if you are a first time buyer of a new home? It means that if you qualify for the program you will not have to pay the Land Transfer Tax!
In order to qualify for this rebate you must be a first time buyer. You are a first time buyer if you have never owned a property anywhere in the world and you are now at least 18 years old. If you are married and one spouse has owned a property and the other has not, it may still be possible to get a rebate. If the spouse who has owned property in the past disposed of it prior to the spousal relationship, then the first time buyer spouse may claim the entire rebate. If either spouse owned property during the spousal relationship, even if they have since sold the property, neither spouse is eligible for the rebate.
You must also be purchasing a newly constructed home and this home must be intended to be your principal residence. The agreement of purchase and sale must have been executed prior to March 31, 1999 and the closing must take place prior to January 1, 2000.
The Minister, Ernie Eaves, said of the program in his announcement, "It's working well, helping young families buy their first house and supporting jobs in the housing industry". It comes as no surprise that two of the biggest lobbying forces for the extension were the Greater Toronto Home Builders' Association and the Ontario Home Builders' Association.
How much is it worth? If you purchase a home worth $150,000 you save $1,225. The ceiling for the program is a purchase price of $200,000 and therefore the maximum savings is $1,725. That is a lot of money and I know that many of my clients will be very pleased to avail themselves of this, one of the few remaining tax breaks for the ordinary person.
If you have any questions about whether or not you qualify for the rebate you should speak with your lawyer. If you are eligible, your lawyer will prepare the documentation required to obtain this rebate.
Bernie Jankowski practices real estate, corporate and estates law in Barrie, Ontario. If you have questions about this article or real estate law in general, write to That's The Law, c/o Toronto Sun, 333 King St. E., Toronto, M5A 3X5.
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